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Wednesday, May 16, 2012

What to Do if You're Failing by Penelope Trunk

Start-up founders tend to say everything's great, all the time. So what happens when that's not even close to true?

There is only one real difference between a startup that exits and a startup that fails: who quits. If the entrepreneur keeps going then the startup isn’t a failure. It’s just in a rough spot.

Here are four ways to get through a rough patch:

1. Tell people.

There’s this terrible code of silence in the startup world. You never tell people when you are having trouble. Your products are great, your customers are great, your cash flow is great. You have to say all this in order to get funding. At least this is the common wisdom.

In fact, though, I have found that the more honest I have been about my funding troubles, the more help I’ve received. At one point, I wrote about how my company was at the edge of financial ruin and I was an emotional wreck. The post did not attract any funding, but it did attract an incredible number of emails from A-list entrepreneurs who offered moral support and encouragement. And that is what got me though the rough spot, mentally, so that I could get myself to the funding sources I needed.

2. Play mental games.

So much of a startup is having a crazy, irrational faith that you are going to be the one in ten that actually makes it.

But no one is perfect. You can’t be perfectly crazy every moment. Which means that either you go completely nuts (not healthy) or you have bouts of rational self-doubt (healthy). During this time of self-doubt, you should find some mental tricks for forcing your brain to remember what it feels like to have faith in yourself. Each person finds their own ways of reaffirming their faith in themselves. Here are five things that help me regain faith in myself.

3. Pivot. Big.

I know that the idea of the pivot is very hip right now. That is, if things are not working with your current model, just change it. You can do this pretty easily if you ride another trend as well: lean startup. If you pivot with a lean startup you get lots of chances to mess up with a very low cost (Bonus: When you talk about what you’re doing, you’ll sound like the king of jargon).

Something I’ve been thinking about is that people don’t pivot big enough. For example, I’ve been thinking that homeschooling is a huge trend right now. And the parents who are jumping on this trend are not religious fanatics. They’re upper middle-class and educated: a perfect market. So why not take a failed startup and open it up for kids to run? Then it’s a homeschool model, with a self-learning component to compete with the VC darling Khan Academy. See what I’m talking about? The farther afield you get with your pivot the more opportunity you have to succeed.

4. Sell your company for a dollar.

Really. The thing you really need from a company is an exit. Because then you’ll be able to get funding for your next company, and then you’ll have more fun and excitement with a high learning curve. It’s hard to say that you’ve failed if you can keep your career full of times like that.

So if your company is faltering and you fear its demise, think about selling at almost-give-away prices, just so you can say you had an exit. Often times, your story is more important than the reality behind your story. I’m not saying lie. But when you say, “I had an exit,” no one says, “Was it for a penny?” Here’s how to do the quickie sale and move onto your next, great thing.

The bottom line, for each of these ideas, is that you are never truly backed into a corner. It’s always up to you to decide if you are better off with this company or without this company. That’s the great thing about owning your own company. You push your very hardest because it’s yours, but also, you’re the one who gets to decide when enough is enough.

Penelope Trunk is the founder of three VC-funded startups. She is the author of the bestselling book, Brazen Careerist: The New Rules for Success, and her blog, penelopetrunk.com, receives about one million views a month. Earlier in her life Penelope played professional beach volleyball, which, believe it or not, taught her just about everything she needed to know about marketing.